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Global Services is considering a promotional campaign that will increase annual credit sales by $530,000. The company will require Investments in accounts receivable, inventory, and

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Global Services is considering a promotional campaign that will increase annual credit sales by $530,000. The company will require Investments in accounts receivable, inventory, and plant and equipment. The turnover for each Is as follows: Accounts receivable 2 times Inventory 5 times Plant and equipment 1 time All $530,000 of the sales will be collectible. However, collection costs will be 4 percent of sales. and production and selling costs will be 70 percent of sales. The cost to carry inventory will be 5 percent of inventory. Depreciation expense on plant and equipment will be 10 percent of plant and equipment. The tax rate is 30 percent Collection cost S Production and selling costs Total collection, production, and selling costs S

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